Thursday, April 30, 2009

TARP explained

Economist Keith Hennessey is posting a series of simplified explanations on how the TARP works. Perfect for students. This post illustrates how the gov't has to overpay for assets in order for the plan to help the banking system the most.

Tuesday, April 28, 2009

Presidents and the Rule of Law

Last night I watched Part 3 of PBS' The American Experience: We Shall Remain series about Native American history. This is history that I didn't learn in school-- not even in AP U.S. history as late as 1997.

Part 3 is about the forced emigration of the Cherokee from Georgia territory. Andrew Jackson was the first president to defy a Supreme Court order, he refused to stop Georgia from expelling the Cherokee even though the Court ruled that Georgia had no right to do so and that the Cherokee were a sovereign nation.

Jackson was a Southern populist and staunch defender of state's rights. Cherokee pleas for him to intervene fell on his deaf ears.

Watching the show, you feel outrage (which is probably the point). Here's a U.S. President more interested in catering to his political base and a particular ideology than upholding the Constitution of the United States (as determined by the Supreme Court in that case) and basic human rights (thousands of Cherokee would later die on the Trail of Tears).

When you compare it to modern-day circumstances, there is a sad similarity. I'm outraged to hear that President Bush and other members of his administration ordered the repeated torture of enemy combatants. While FoxNews has discredited the "183 times" story, it still doesn't sit right that we moved aggressively to do things like waterboard. Dick Cheney and Donald Rumsfeld reportedly weren't just trying to keep America safe-- they were trying to coerce confession that there was a link between Iraq and Al Qaeda (there wasn't). Cheney (or someone) ordered the confiscation and destruction of legal memos that expressed concern or opposition to the practice. There was only one interpretation of the law that mattered to them.

There was clearly an ideology that pushed our nation into Iraq, condoned treating detainees harshly (either at secret prisons or at Abu Gharaib... what's the difference?), and then refused many of the people whose country we broke entry into the U.S. It sounds to me like we considered some Middle Easterners about like Jackson considered the Cherokee-- as less than human.

Bush has his ideological supporters. You can see them on FoxNews. Unfortunately, I've also seen too many pastors in recent days lining up to defend the use of "harsh interrogation tactics," including waterboarding. My opinion is that if John McCain, a man who knows what torture is, says waterboarding is torture, then it is torture. And I'm ashamed to see so many professing Christians defending and praising the practice.

More Apocalypse-- real life version

WSJ is reporting that Citigroup and Bank of America earned poor marks on the stress tests and are in danger of being insolvent, needing to raise billions in capital. Both banks are protesting the results, naturally. (I think we business school educators must ingrain it in econ/finance majors to protest their grades as unfair or biased).

Floyd Norris in the NY Times is reporting that defaulting on loans (bonds) in the next couple years will lead to a potentially disastrous wave of bankruptcies.

Moody’s reports that leveraged companies need to refinance $26 billion in loans this year, $44 billion in 2010 and $120 billion in 2011. If credit markets remain tight, we could see lots of defaults even among companies that are doing well enough to make their interest payments.

The bond market started to look like the subprime market and Norris expects the same results. Under no circumstances is this a good thing.

This Week's Sign the Apocalypse is Upon Us

(Stealing a piece from Sports Illustrated there). When I was little it was Care Bears and Cabbage Patch Kids. Now, the rage is apparently

Gangsta Babies!

  • Big babies with big poppas!
  • The blingin'-est kids in daycare!
  • They spend more on accessories than you do on your cars!
Babies be trippin', man! They're not old enough to talk yet, and they still dress better than you do! This 10-inch hoodlers are A-Listing in the playground. Rockin' fab-tastic clothing and so much baby bling that other rug rats can only catch their vapors. Pookie's a green-eyed baller. But don't make him cranky...ya wouldn't like him when he's cranky. Featuring a thermal shirt, t-shirt, dew rag, ring, and pimped out pacifier necklace.

(HT: Carpe Diem)

Come, lord Jesus!

Monday, April 27, 2009

Why I hate Twitter & Facebook

I'll start with Facebook-- they turned it into Twitter. Now when you log in you see everyone's hundreds of status updates. It's less-easy to control settings for, you have fewer options than with the "old" Facebook, and, in my view, they ruined the product. I'll write a post another day on the economic reasoning of why they can ruin a product and still get a reported 1 million new users a day.

I have been using TweetDeck to organize my Twitter feeds, and have been trying to "tweet" like most Twitter users do.

Facebook, Twitter, MySpace, and blogs allow people to do four things:
1. Transmit information about themselves.
2. Consume information about others.
3. Feel "connected."
4. Waste time.

On #1:
One purpose of Twitter is to reinforce a feeling of self-importance. You tell people what you ate for breakfast, or where you're going, or what you're reading. Because everyone considers him/herself important, therefore whatever he/she does must be important. So you tell the world what you're doing because why wouldn't they want to know?

With Twitter, you get an audience of "followers." In about a week's time I have gotten 25. I don't know who most of them are, probably market researchers or spammers. But now I feel obligated to inform the masses what I'm doing. And I know that people are listening, and that makes me feel important.

I'm pretty sure there is a large volume of Scripture about how we should not aim to feel more self-important outside of our identity in Christ. So, I'm becoming convinced that Twitter may be at odds with that. But so would be blogging. Except with blogging, you can work out more of your thoughts and opinions like a journal, rather than only 140 characters like Twitter (not useful for complete thoughts). So, why don't I journal rather than blog? Probably to transmit information about myself and feel self-important?

Twitter definitely has a stalkerish aspect. It's like Facebook except much easier to gain access to the (very limited) information. Twitter feeds are, by default, public. Users get an email that you're following them, but they may have gotten used to all the random people (spammers? market researchers?) following them and not think anything of it. So, it's less personal then getting a "Friend" invitation on Facebook where you can check the person's background.

I follow Coach Calipari and he Tweets often. He has thousands of fans following him and hanging on every word (these get reposted on message boards). Same thing with Ashton Kutcher. You can respond to their Tweets and sometimes they will write back, sometimes so everyone can see it.
I also follow John Boehner. He updates about pending legislation and political rangling. I find that information interesting, the links he posts often go to articles or bills that are worth reading.

Is that a good thing? Is it truly useful? (there's also the whole issue of whether or not it's really John McCain posting but rather a staffer or a fake or someone else).

I definitely feel more connected to Coach Cal and what he's doing for Kentucky basketball. I feel more connected to the journalists that I read, and know more about the stories they're developing, how they spend their free time, what music they listen to... I also know what members of my family are doing.

Is it useful to be connected in such an esoteric way? I'm connected to Nick Kristof in an electronic stalkerish sort of way. But he doesn't know me, doesn't care about me. I know what he's eating or thinking but does that truly make me connected?

Reading Tweets, even well-organized ones via TweetDeck, is time consuming. It has crowded out my blog reading time. The blogs I read are longer, more technical, and have more information than a Twitter feed. So, I feel like my time is wasted by reading the 140 character Tweets.

And I wrote this post, and that obviously took some time... (if you followed my Twitter feed, you'd know why I had the time...yikes).

Sunday, April 26, 2009

Why NASCAR is the greatest sport

If you missed the last 5 laps of Talladega today then you missed some of the most intense, horrifying, and awesome moments in sports history. Photo: via

Not only does Carl Edwards almost die in a horrifying last-lap wreck (which injured several fans--only in NASCAR), but he has the fortitude afterwards to get out out of his car and jog across the finish line, Ricky Bobby style (watch the video link above for the whole final 3:00).
And then to congratulate the rookie who wrecked him and commend him for doing "the right thing." That's as classy as it gets.

This is the only sport where you can see a 50 year old with the right equipment whip the younger drivers (Mark Martin last week in Phoenix). The only sport where you hear the competitors say "I'll stop short of complaining and just be thankful for what I have," (Mark Martin after being wrecked today).

If you got tired of hearing the "Yo, yo, I finally got mine, dawg" interviews from the NFL draft this weekend, this race was the perfect antidote.

NASCAR-- the perfect combination of physics, chemistry, physical strength, intelligence, and sheer willpower. And the only sport I can watch for 3.5 hours without ever changing the channel.

Thursday, April 23, 2009

I hate Twitter (Part 2)

At the advice of my brother-in-law, I'm going to install TweetDeck. I'm not sure how having my Tweet feeds more organized will make them easier or more useful to read. I will still have dozens of tweets to read. Clutter is a problem. My blog feed reader has 150 feeds in about 20 categories and I have 5,500 unread posts right now. I imagine with Twitter it will be something like 20 feeds but 20,000 unread tweets.

But I digress... I hate Twitter because every time someone posts a link to something, it's not a true URL but rather a Twitter-modified one (the thing). Clicking on any of them angers the firewall at my workplace. It thinks I'm trying to use a proxy server to get around the firewall and look at obscene content. Therefore, I cannot look at anything anyone links to, and those tweets are useless.

The Worst Time of Year

My year typically has 2 low points, near the end of both semesters.

1. Students are burnt out. They have projects due in multiple classes, student activities reach their peak (performances, competitions, etc.), and attendance falls off accordingly.

2. Students are frustrated. Opportunities to improve grades are becoming slim. Suddenly, that third exam a student does badly on appears to have ruined their GPA forever (as if the first two exams and the missed homework assignments didn't play any part). They come to my office. They cry. They argue. They beg. They complain. They leave unhappy.

3. Students pass judgment. This is also the time of year of student evaluations, where they get to express their frustrations anonymously to my superiors. You can see their eyes light up when they find out it's time to write their thoughts.

4. Students are unforgiving. I'm human and I make mistakes. I don't mind correcting those mistakes and apologizing for them. (Sometimes my mistake is the result of a mistake by someone who wrote a test bank question that had 2 right answers). But mistakes are unforgivable as they compound a student's frustration.

This is the time of year when you find out who your friends are. You find out that the student who pretended to care all semester secretly hates you and once they realize they can't get the grade that they feel they "deserve," they let everyone know it.

The nice thing is that in a few months you'll have a ton of new students who have never had you for class and don't yet hate you. Also, some of the ones who hated you will have graduated and moved on. And then a few months after that the ratio of hate/not hate will grow larger again...

Wednesday, April 22, 2009

I hate Twitter (Part 1)

I don't have multiple parts already written in my head, I can just forsee writing them in the future.

Reason #1: Twitter claims that "Twitter puts you in control and becomes a modern antidote to information overload."

The site is the exact opposite-- the epitome of information overload. That's because people are always writing too much information. How do people that follow hundreds of others via Twitter sort through all the thousands of posts every day? And when only 1% of that information is effective and useable...

Tuesday, April 21, 2009

"All I hear is 'blah blah blah'..."

I sing this YouTube clip a lot. It's called "Hey Paul Krugman," it's by a guy who writes and uploads a song a day. (Warning, one vulgar word in the clip). I don't agree with what it says about Dr. Krugman (I don't want him in the administration) but I totally agree with what it says about Timothy Geithner. And I love the part at 1:24. You should watch this clip at least once.

I was listening to it thinking about seeing Geithner talk nonsense in his Congressional oversight hearing today. I checked Krugman's blog, and he's again making Geithner look foolish:

"What Geithner said, then, was true but useless. If anything, his wording was cause for concern: Treasury knows the difference between raw numbers of banks and asset holdings, even if the press seemed to miss the distinction, and if he’d meant to say that the vast majority of assets are held by sound banks, he would have."
The IMF knows that we're hosed. Why can't we get straight talk from Geithner about it?

Monday, April 20, 2009


Mark Thoma providing more evidence (as if we need any) that the Treasury Department is making this whole thing up as they go, throwing proposals out there before they've been properly thought through (or before Treasury has enough staff to have people to think about it, still a problem now). When the recession is behind us, will they botch the rule re-writing as badly as the "rescue"?

Sunday, April 19, 2009

Easter Sermon

Elias is sick this morning so I'm at home while Joni does church. While I enjoy our pastor's sermons, I also enjoy having an occasional Sunday to listen to some others.

I've been reading in 2 Kings this week, and it just so happens that Greg Pinkner, from Fellowship Church in Knoxville (linked on the right), used 2 Kings 6:1-7 (The Axe Head Floats) as his Easter sermon last Sunday.

The axe head story is always one that I read saying "Yeah, that's a cool miracle," but I didn't really grasp any eternal significance of it. Pinkner shows how it is a great Easter text (listen here).

Wednesday, April 15, 2009


I'm scheduled to speak on the economy at the Bolivar Senior Citizens Center on Thursday. You can check out my Powerpoint here. *update* Slides are updated and you can also view the notes, which contain my dialogue.

Why Democrats think Republicans are Stupid

Exhibit A. (Bolding mine):

Protesters, using a rented truck to haul the million tea bags, began unloading their cargo at the park this morning but were told by officials that they didn't have proper permits and must move the tea . They complied with the order but are still considering what to do with the load.

The tea had been purchased online by people upset over recent government policy, said John Gauger, a spokesman for the grass-roots conservative group

The protesters got more bad news when security officials also told them that they did not have proper permits for a rally in front of the Treasury building.

That noon-time protest had been expected to provide a national stage for speeches by such figures as Grover Norquist of Americans for Tax Reform; former presidential candidate Alan Keyes; and Thomas A. Schatz, president of Citizens Against Government Waste. But after the discussion with security officials, the protesters sent away the advance crew that was to set up risers and equipment for news crews....

About midafternoon, the rally was temporarily suspended after what appeared to be a box of tea was thrown over the White House fence and officials evacuated the park as a security precaution, police said. The park was reopened shortly afterward.

1. The tea-parties were not a "grass roots" event. Please stop pretending. The variety of clever signs, the same soundbytes coming from every location shown on the news, this was a poorly-orchestrated event by Dick Armey and others. The battle is currently raging for the heart and soul of the Republican party. I want to know who the brains are going to be.

2. Grover Norquist, Alan Keyes? *deep sigh*

Disturbing quote of the day

Mankiw links to a VOX re-print of an article by Hall & Woodward about Fed policy. Their main point is that future inflation shouldn't be a concern because the the Fed can raise the interest rate it pays on banks' excess reserves, encouraging banks to hold more reserves. This is a new Fed policy tool that they implemented while I was in the middle of teaching about the theory in Money & Banking last semester. I posted here about it at the time.

The article contains this quote (italics the authors'):
Raising the reserve interest rate is a contractionary measure. A higher interest rate on reserves makes banks more likely to hold reserves rather than increasing lending. The Fed’s decision to raise the reserve rate from zero to 75 basis points just as the economy entered a sharp contraction in activity is utterly inexplicable. Fortunately, the Fed lowered the reserve rate subsequently, but the continuation of a positive reserve rate in today’s economy is equally inexplicable.

It's nice to see experts saying something is "inexplicable," as I had no way to explain it to students last year. When a bright student asked "So, we read in the papers (and a Fed press release last year) that the Fed is upset because banks aren't lending, yet we see here that the Fed is paying them not to lend? How can that be?" Inexplicable.

Other economists were saying that it was explained by the Fed wanting to basically recycle created money back to the Fed to fund the purchase of risky assets the Fed was buying-- agency securities, MBS, commercial paper, etc. Despite all of his recently candid speeches, I don't think Bernanke has ever said anything meaningful about it.

Note: I disagree with the authors' conclusion that the Fed can unwind all of this inflationary risk tidily. If this were all taking place in a vacuum, I'd agree. But because of the balooning federal deficit (expected to balloon more in the near future with entitlement spending increases) foreign investors have expressed some hesitancy about purchasing U.S. Treasuries. China is currently slowing its purchase of U.S. assets. If investors aren't willing to buy the Treasuries, then the Fed will have to buy them... and it is currently purchasing Treasury notes instead of just Treasury bills which is rare. Arguing that the Fed can do this all they want, keeping long-term interest rates low, and keeping the massive lake of the cash dammed up by paying increasingly higher rates on reserves to banks just doesn't sound right to me. It's like a free lunch.

I wrote that last sentence before I saw Beckworth's post on the same subject: There is no free lunch in central banking.

Tuesday, April 14, 2009

I need technology help

I need a portable device that will do the following:

1. Allow me to carry and read PDF documents (like a Kindle does).
2. Allow me to read newspapers and blogs (like an IPhone or Kindle do).
3. Allow me to listen to mp3s (like both of the above do?)
4. Allow me to talk on the phone? (optional, I guess)

Here's the catch:
I need it to be cheap. I can handle a high up-front cost (but not $350 for a new Kindle, that's crazy high).

I need the monthly service charge to be very cheap. I'm currently not even willing to pay $70 for a contract cellphone with unlimited minutes/text. Can I get internet access with a portable device for less than that?
(We pay about $35 every 3 months to use a GoPhone between the 2 of us. And we don't use it much. That's how cheap and unconnected I am away from my computer).

I know with a Kindle you can subscribe to newspapers and magazines relatively cheaply, you're always connected to the content you subscribe to via Verizon. But in order to read blogs on a Kindle you have to pay a steep per-blog fee (that's also crazy, IMO).

Is there a solution for me? What's the way I can maximize my above requirements and for the cheapest cost? Any ideas?

Sunday, April 12, 2009

On the Protests in Moldova

(Pictures from

Honestly, I've been too busy to follow much of the news from Chisinau. I first heard about the riots on NPR on Thursday. I came home and checked my Russia-related blogs and sure enough there was plenty of talking and linking. The best blog for updates is Scraps of Moscow. The NY Times now has people there, The Economist has written a story, Moldova is getting a lot of (previously very rare) ink.

I haven't heard from any of my Moldovan contacts in a while. I wasn't friends with too many university students, but I have to say that I'm surprised the outcry was as strong and violent as it was.

Having briefly lived there, I can say that Moldova has a feel of being trapped in the East while the West is so tantalizingly close. Around 25% of the citizens live & work abroad. Most of the people I knew just felt frustrated that the Communists were delaying the inevitable modernisation of Moldova and eventual unification with Western Europe. The Communists allegedly stealing away a victory and keeping power has many residents' frustrations boiling over. And I imagine a great deal of the frustration is economic right now--neighboring Ukraine having melted down and Romania in not much better shape.

And the Communists always have excuses. Outgoing President Voronin has long tried to exaggerate any opposition as being puppets of Romania, which just isn't true. As I heard one student quoted "We don't want unification with Romania, that's crazy. We just want a better life here." Chisinau's mayor is Pro-Western and had been shunned by the national government. The President wouldn't meet with the U.S. Ambassador, but the mayor would frequently.

But the election doesn't appear to be too illegitimate. The opposition just appears to be too fragmented in the face of the ruling party, similar to what you see in Russia. And the West doesn't appear to have any formal hand in orchestrating the riots. That's what makes the outrage of the students so... innocent?

Sadly, I won't keep up much with the coverage. I imagine things will continue as they have been, eventually the inevitable will happen and Moldova will move closer to Europe (if the doomsday scenario of Russia keeping that from happening doesn't happen).
Perhaps the EU will step up its presence in Moldova? The U.S. has a somewhat strong presence with plenty of Peace Corps, diplomatic corps, Fulbright scholars, and missionaries active there. As The Economist put it:
If Europe cannot solve Moldova’s problems, it is hard to see much future for the trumpeted “Eastern Partnership” which is meant to reinvigorate EU policies towards the six ex-Soviet countries on its eastern borders.

Europe's recessionary problems aren't likely to abate anytime soon, so I imagine Moldova will return to the backburner of political attention and news coverage. It's not an economic hub or a pipeline country or a harbor for Islamic terrorists, thus it's just not that important to the West. And that's sad.

Ultimate Pressure

Poor Kenny Perry.

Friday, April 10, 2009

Gem of India in Springfield, MO

We'd been patiently waiting several months for a chance to hit the lunch buffet at the Gem of India in Springfield today. It did not disappoint; it was awesome! I love Indian food, and I think this is the best Indian food I've had in the U.S., easily the best Indian buffet we've been to. If you're in the area you should definitely check it out.

I don't know the name of many Indian dishes, but their eggplant and spinach dishes were amazing. Their lamb curry and lamb fritters were great. The chicken masala was a bit tangy, but very tasty. There was nothing extremely hot on the buffet, but you can order hot (ie: very spicy) dishes off the menu.

It's worth the drive just for the mango pudding and the chai. The chai is on the buffet, so that's like an added bonus that I've not seen other places.

I give the Gem of India 5 stars.

One oddity about it, all of the ethnic-looking people I saw eating there were accompanied by Americans. From what I overheard, a lot of former missionaries frequent the place with Indian friends. There were some at a table next to us.


Major props to this lady.

On Tornadoes and DTV

We had a line of severe storms move through here last night, dropping at least one tornado and bringing 70 mph straightline winds and hail everywhere. This was our first tornado warning here in the Alley, we missed an earlier one while we were gone for Spring Break.

The primary way to get up-to-the-minute info is to turn on your local TV, right? However, the new digital TV signal is heavily affected by the weather. Your converter can't form a picture without a very strong signal, and when there's a bad storm directly over the TV station's broadcasting equipment then its broadcast signal is affected. This is bad. Fortunately, a couple stations still came in clear enough to make out what they were saying, and we never lost power so I could follow the storm track on the internet (with the 5 minute delay on

Overall, I have not been real impressed with the Springfield weathermen. We got spoiled in Waco by Andy Wallace, the best (and most weather-paranoid) weatherman in the U.S. Rule #1 for weathermen: NEVER apologize for preemting a rerun of Grey's Anatomy. The ABC guy did that last night, saying "sorry, but we have a life-threatening situation here." And if you're a Grey's fan, never ever call a TV station to complain about your show being preempted. Watch the rerun all you want to online.

We only have one station with the 3D stormtracker weather map action. This does a good job, but the weatherman seemed only interested in telling us what was happening in Springfield proper and didn't zoom out much. Nevermind the red box on the map indicating that a tornado is coming toward Bolivar...

Probably the best job done last night was by the local NBC station that simply put up the standard radar onto the screen the entire time (zoomed way too far in) and read off the reports they were hearing from HAM radio operators and people calling in. We never lost that station's DTV signal, so I was able to feel somewhat informed.

Overall, I feel that the DTV transition has made us less safe in the event of a weather emergency.

Thursday, April 09, 2009

Fighting Global Warming with Artificial Trees

I heard this on the news this morning and thought I had fallen asleep at the wheel or something (ie: I thought I was dreaming, this couldn't be real).

White House's new science adviser says the administration is thinking of investing in technology that will physically cool the earth's atmospheric temperature. Like artificial trees that suck CO2 from the atmosphere. Look at the downside:

Holdren, a 1981 winner of a MacArthur Foundation "genius" grant, outlined these possible geoengineering options:

_ Shooting sulfur particles (like those produced by power plants and volcanoes, for example) into the upper atmosphere, an idea that gained steam when it was proposed by Nobel laureate Paul Crutzen in 2006. It would be "basically mimicking the effect of volcanoes in screening out the incoming sunlight," Holdren said.

_ Creating artificial "trees" — giant towers that suck carbon dioxide out of the air and store it.

The first approach would "try to produce a cooling effect to offset the heating effect of carbon dioxide and other greenhouse gases," Holdren said.

But he said there could be grave side effects. Studies suggest that might include eating away a large chunk of the ozone layer above the poles and causing the Mediterranean and the Mideast to be much drier.

And those are just the predicted problems. Scientists say they worry about side effects that they don't anticipate.

I suddenly worry about wingnut ideas like this showing up in stimulus bills.

Tuesday, April 07, 2009

How to pick a successful NCAA tournament bracket

Pictured below is my NCAA "sheet of integrity, " on the NY Times website. I was playing for a Kindle. No econometric model (which I usually do), no long hours of analysis, no money spent, and not many games watched this year. You'll see I finished #258 out of how many tens of thousands (not sure how many played, but it is the #1 newspaper in the world and the game was featured prominently on the front page). I missed 15 games. The winner missed 7. This is better than I've ever done with my model.

I also entered a bracket in a Yahoo family group, lost to my mother-in-law (congrats, Jan).

I feel like Taleb saying "All econometrics is useless." My train of thought:

1. Last year was an anomaly with four #1 seeds. We rarely see three #1 seeds, so I picked 2.

2. Last year was an anomaly that there were 4 NBA-ready dominant teams. Pomeroy's pythag was something like 99% accurate last year, so everyone jumped on that bandwagon. That's how financial markets create bubbles and busts. That strategy picked Memphis this year.

3. There are rarely upsets of 1-4 seeds in the first 2 rounds.

4. I didn't watch much basketball. From games I watched, North Carolina was ridiculously good and Louisville only beat Kentucky by 3.
I only picked Pitt in the Final 4 because Seth Davis and Clark Kellogg seemed to think it was a no-brainer on selection Sunday. The last UConn team this talented lost to George Mason, so I didn't think they'd proceed to the F4.

And that's about it. The last 2 years have seen relatively few upsets and some boring games. Will that trend continue, or are we due for a crazy bracket next year? I don't know.

Saturday, April 04, 2009

Our friend is in a beer commercial

Joni and I went to college with Alex Beh, a definitely unique person from Chicago, IL. By "unique" I mean off-the-wall hilarious. Alex was very active in our church group.

We just spotted Alex starring in the new Bud Light ad during the Final 4. The one where the guys open up a door into a Wild West saloon. Alex says "Draw a door..."

First time I think I've ever seen someone I know in a national commercial. Way to go!

Higher oil prices on the way?

Since I was wrong about the price of oil staying high, let's see if I can be wrong again.
A couple of articles bring this to my attention (HT: SAR):

1. Matt Simmons argues that
"We are three, six, maybe nine months away from a price shock. We are not talking about three to five years away -- it will be much sooner," Simmons told Reuters in London.

He bases that on the fact that aging oil fields are seeing declining output, and the low price of oil discourages firms from necessary investment. The credit crunch is also hindering investment to keep production up and systems running.

The IEA (Int'l Energy Agency) is also worried recent cuts in oil production by the Organization of the Petroleum Exporting Countries in an attempt to bolster prices have left oil inventories dangerously low, leaving little room for maneuver when oil demand recovers.

2. The Wall Street Journal reports that Russian oil producers have also cut back production in light of credit problems and high taxes.

But little attention is being given to Russia, where crude-oil output fell last year after a decade of increases. Russian producers pay high taxes, which leave them with limited cash to spend on maintaining fields and bringing new production online. Meanwhile, tight credit markets are slowing the flow of loans to the sector.

"We believe [Russia] will add to the growing global supply curtailment by the end of 2009, a factor which isn't fully appreciated by the market," said Oswald Clint, an analyst at Sanford C. Bernstein in London.

If economic recovery (ie: positive GDP growth) is to begin in the 4th quarter as projected, then growth will begin occurring just as oil output is bottoming out. This should lead to a big jump in the price of fuel, possibly hindering economic growth (and leading to higher inflation in general both from the supply and demand side).Yikes.

I'm thinking about taking a long position on InTrade.

Friday, April 03, 2009

David Brooks today

Good column by Brooks today, summing up the two competing schools of thoughts (with included links to articles by those schools. I read the Simon Johnson piece last week, it's a good read).
Brooks sums up what Niall Ferguson said about modern financial crises in The Ascent of Money:
"Too many people were good at math but ignorant of history."

Where you fall in the two schools of thought is important to what policy you'll prescribe. I agree with Brooks, financial CEOs aren't as smart or as well-organized as Simon Johnson (and the Left generally speaking) make them out to be.

The greed narrative leads to the conclusion that government should aggressively restructure the financial sector. The stupidity narrative is suspicious of that sort of radicalism. We’d just be trading the hubris of Wall Street for the hubris of Washington. The stupidity narrative suggests we should preserve the essential market structures, but make them more transparent, straightforward and comprehensible. Instead of rushing off to nationalize the banks, we should nurture and recapitalize what’s left of functioning markets....To my mind, we didn’t get into this crisis because inbred oligarchs grabbed power. We got into it because arrogant traders around the world were playing a high-stakes game they didn’t understand.
Always makes me happy when I'm reading (or have read) the same thing that others are reading and find important to pass along.

Wednesday, April 01, 2009

Coach Calipari

Well, I was wrong. It's been an entertaining few days, anyway. What I'll remember about the Calipari search-and-hire days:

  • The live video feed from outside his empty office.
  • The live video feed from outside his house.
  • His daughters being hilarious on Facebook about it, posting links to the live feeds and joining groups like "Coach Cal to UK," while befriending Jodie Meeks and others.
  • The Memphis media spying on Coach Cal at a donut shop.
  • Mark Story's article yesterday written as a concerned open letter to Lee Todd about Calipari's sketchy practices and players with criminal records. I agree with Story's concerns. Todd has answered by saying Calipari has passed all background checks and that Worldwide Wes "works for a lot of people."
  • John Clay's reminder that Calipari has never had an NCAA accusation against him.
  • The live video feed of Calipari in a UK booster's plane taking off from Memphis (Memphis television stations just love these live feeds, I guess).
  • The accolades from ESPN just days after everyone was dogging Kentucky.
  • Ryan finding some old emails I'd written about Calipari news stories a couple years ago.
Have we "sold our soul to the devil"? Maybe. Considering some of his top recruits could come with him, the deal sounds way too good to be true.

With signing bonus it comes out to $4.3 million/year. Considering UK is still on the hook for millions to Gillispie, which his lawyer will fight for, and we're in the middle of a recession where UK has been slashing its educational budget, it seems an unbelievably high price to pay. I need to re-examine my priorities.